While the U.S. economy was half asleep over the holidays, many parents still had to work and, thus, many child care centers were still open. Now, low-income families and the child care centers that provide care and education for their children have another stressor on their plate: the threat of funding cuts.
On Dec. 26, 23-year-old YouTuber Nick Shirley and conservative lobbyist David Hoch posted a video to YouTube claiming to surface evidence of a $100 million fraud scandal involving subsidized child care centers in Minnesota. The duo’s video eventually resulted in President Donald Trump’s administration announcing a freezing of $10 billion in social services funds for five states led by Democrats, including Minnesota. And Minnesota Gov. Tim Walz, the former Democratic vice presidential candidate running for a third term as governor, announced Monday that he was abandoning that effort because of long-running scandals over fraud in the state’s social services, including child care, some of which have resulted in convictions.
Shirley’s video could lead to center closures and thousands of families across Minnesota losing access to child care.
The authors of this piece take fraud seriously. Still, because we study the limited amount of affordable quality child care nationwide, we know that the ripple effects of Shirley’s video could lead to center closures and thousands of families across Minnesota losing access to child care.
When Deputy Secretary of Health and Human Services Jim O’Neill posted to X last week that he had “turned off the money spigot,” he was referring to the federal funding Minnesota uses to offer child care subsidies for low-income and moderate-income families. This “spigot” is more like a rusty watering can. The federal subsidy program is underfunded so severely that only 8% of the nation’s children who qualify for a subsidy are able to use one.
That’s why efforts to freeze funding are so concerning. We have spent years studying child care in a range of states, including Colorado, Massachusetts, New Hampshire, Texas and Wisconsin. We have interviewed parents, directors and teachers. Casey Stockstill, a sociology professor at Dartmouth College, spent months observing two centers. In all places, the subsidized child care system already struggles to support low-income working families. In Massachusetts, for example, the waitlist for the subsidy was recently as high as 16,000 children, and in Texas, the waitlist was recently about 75,000 children. In Colorado, the waitlist to apply for a subsidy isn’t even open.
There is no state-level waitlist in New Hampshire, but spots are left unused because of another hurdle: matching spots to children. For a subsidized child care spot and a child to find one another, there has to be a particular alchemy: a nonfrozen waitlist, available funding, accurate paperwork and, most importantly, a center close enough to a family’s home or work that has state licensing approval to enroll another child and a teacher hired and able to teach that child.
When a child care center director agrees to accept a state subsidy, they are agreeing to extra paperwork, and in some cases, to take a payment lower than the actual cost of care. In short, they are donating their time and cutting into razor-thin profit margins. Many centers do not have the resources to sustain even one week’s loss of funding. The vast majority of child care providers are women who chose their career to help families. And after the Covid-19 pandemic and persistent inflation, child care providers are running on fumes.
“Even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of the crisis.”
Minnesota Gov. Tim Walz
The pair who made the viral video made a point of saying they couldn’t see any children at the child care centers they visited and no one would show them any. There are reasonable explanations for that. Child care centers, similar to schools, take precautions and, for the safety of the children they keep, don’t just let anybody in. If you are not an existing parent but wish to tour the center, most centers require you to set up a tour in advance. Child care directors are also busy. Because profit margins for subsidized child care centers are so low, and staffing is difficult, directors often have to step into classrooms to meet ratios. That means they are not available to accommodate spontaneous requests by unannounced visitors for a tour.
In their video, Shirley and Koch made an issue of what they frame as the poor conditions of the centers, including painted windows, locations in strip malls and industrial areas, and no outdoor space. In reality, such conditions are common in child care and are an unfortunate result of the severe lack of funding and infrastructural support allotted to subsidized providers. Facilities are frequently in need of repair, and many do not have easy access to outdoor space. The remedy to this problem, however, is not to take more funding away.
Shirley’s video is directly out of a decadesold political playbook to undermine social services. Unfortunately, public opinion is heavily swayed by these types of misleading videos. Research, however, has found that welfare fraud is pretty rare. In fact, when journalists and state officials followed up with the centers Shirley had visited, they found that they were all operating normally.
As he ended his reelection campaign, Walz warned against the panic Shirley’s video has incited: “Even as we make progress in the fight against the fraudsters, we now see an organized group of political actors seeking to take advantage of the crisis.” We agree. Even if the funding freeze remains only a threat, the current panic undermines the credibility of hardworking child care providers nationwide and threatens the livelihoods of families. Shirley’s allegations are a political stunt that could compromise what little infrastructure we have to support working mothers and their children.
